Commercialization of an Acoustic Camera

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Commercialization of an Acoustic Camera
Ed Belcher Bill Hanot Joe Burch Sound Metrics
Corp.
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DIDSONDual-Frequency Identification Sonar
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7.9 ft Shark
A 2.4m (7.9 ft) shark swims in the Oceanopolis
Aquarium in Brest, France. The data were
collected with the DIDSON Diver Held model held
over the top of the aquarium tank wall. Courtesy
of Jean-Yves Cueff, NEOTEK.
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Deck of Sunken Ship
Changing the tilt of DIDSON, captures the deck or
railing of a sunken ship and fish above the
deck. Taken with Diver-Held DIDSON Diver
Dave Elliott, NOAA
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Disclaimer

• This is a discussion on our commercialization
  process. I am not endorsing this process for
  everyone.

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Before the Beginning

• At APL we mostly made systems that satisfied the
  sponsor but did not generate much interest
  outside the sponsors specific application.
• We thought our lens-based sonars could be
  commercialized.
• We tried to license the technology to an existing
  company.
• Companies were not interested. One, company,
  said it would accept a license only if we first
  found a buyer for 40 systems.
• After 15 DIDSONs were sold from APL to a variety
  of users, we decided to try to form our own
  company.
• We had no promise of purchase from anyone. We
  thought if we started small and only sold 3 to 6
  sonars, we could at least pay off our start-up
  loans.

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The Steps We Took

• Stated our intentions to the APL chain of command
• Learned specific steps from UW Office of
  Technology Licensing.
• Obtained permission to work outside the UW in a
  area of potential conflict of interest. (forms
  and permissions from Department Head, Director,
  Dean of COFS, and a Vice Provost.
• Incorporated Sound Metrics
• Completed negotiations for an exclusive license
  with the UW OTL
• Teamed with Ocean Marine Industries, Chesapeake,
  VA
• Mortgaged equity in our homes and established
  lines of credit

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The Steps We Took

• Started operations in my basement

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The Steps We Took

• Plowed revenues back into the company to build
  more sonars.
• No SMC salaries were paid in 2003
• Ed retired in Dec 03, Joe resigned May 04, Bill
  resigned Sept 04
• From March 2003 to July 2005, we operated in the
  basement of my house.

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The Steps We Took

• In July 2005, we moved to a suite (1,900 sqft) in
  an office building at 15029 Bothell Way NE

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The Steps We Took
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The Steps We Took

• DIDSON status through Nov 1, 2006 over 100
  shipped and 7 demo/rental units are in
  operation
• Our start-up loans are paid off
• We are getting a salary
• Number of Employees 3 full-time and 2 part-time.

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Teaming with an Experienced Partner

• Ocean Marine Industries, Chesapeake, VA, is
  valuable for selling our products and as a
  business consultant
• We value their experience
• Obtaining and tracking customers and closing
  deals
• Processing Government Contracts, POs
• Expediting payments
• They are paid by commission

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Commodity Jurisdiction

• APL asked the Department of State for a commodity
  jurisdiction for DIDSON
• DoS responded and put DIDSON on the U.S.
  Munitions List
• To ship outside of U.S.A (Canada is an exception)
  we needed an Export License
• Ocean Marine worked hard for over 2.0 years to
  get us off the USML. We are now off, and go
  through the DoC.
• Try hard to avoid getting your product on the
  USML.

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Out-Sourcing, a Type of Leasing

• How do we make sonars with only 3 full-time and 2
  part-time people? We chose to work with a number
  of companies with needed talent and equipment
  rather than do all the work in-house.
• Machining Parts
• Circuit Board Assemblies
• Array Fabrication and Potting
• Cable Assemblies
• Payroll
• Books Checked and Taxes Prepared by Certified
  Public Accountant
• Specialists that do needed tasks outside of our
  expertise
• Sales and Contracts with Customers
• Rent office and work space
• There is risk in this approach. You cannot
  easily control the schedules and priorities of
  outside help. So far, we have not been severely
  burned.